The tools available via Amazon.com Inc.’s advertising unit, Amazon Marketing Services (AMS), aren’t intuitive, says Chris Jahnke, chief marketing officer at ConversionPoint Technologies Inc., an online retailer that sells private-label health and beauty products. That makes managing AMS ad campaigns a manual, cumbersome process. Even so, ConversionPoint Technologies plans to boost its AMS spending by 500% next year. The reason? The platform is boosting the retailer’s sales on Amazon’s online marketplace at a reasonable cost. Highly targeted keywords using AMS cost ConversionPoint Technologies about 4.7% of a sale on average, which Jahnke considers “great.” For broader keywords, the retailer’s average keyword cost of sale ranges from 15% to 25%, which is certainly higher, but “still great,” he says.

While a 500% jump in spending sounds significant—and it is—it’s worth noting that ConversionPoint Technologies’ AMS spending increase stems from a small base; Amazon ads currently represent less than 1% of the retailer’s digital advertising spending. But the retailer is new to AMS, it began investing in the ads about six months, and the rapid growth of the retailer’s interest in Amazon’s advertising offerings is a sign that AMS is quickly emerging as an important piece of ConversionPoint Technologies’ marketing mix.

ConversionPoint Technologies is hardly alone among retailers finding that Amazon is becoming increasingly effective marketing channel. Amazon is limited in that its ads aim to drive sales on its site and app, which means merchants have to pay for the ads, as well as for Amazon’s selling fee to list their wares on the marketplace. Still, Internet Retailer’s recently released “2017 Digital Marketing Survey” found 27.6% of retail marketers currently advertise on Amazon and that percentage will tick up to 28.7% next year. That penetration is expected…

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